Emerging Trends: Don't Put Me on Your Bid List!

By Steve OndichCommercial Forest Products

THIS year has been a rude awakening for many sales professionals. A few years ago, large sales were easily had. In 2009, reps are working twice as hard for smaller sales. Margins are also tight due to intense competition among companies that are willing to sacrifice profits for the sake of staying busy.
The good news is that unless you've traded in your Blackberry and drive-through Starbucks for a pork-pie hat and a place in the soup line, you're still in the game. The bad news is that you're far from alone.

Complaining about the bad economy is very 2008. The new water cooler rant is that there are too many companies competing for the same small pool of work. When 30 piranhas are stuffed into a 12-gallon tank, any morsel of food is quickly devoured-yet all of the fish remain hungry.
As salespeople, we can either accept mediocre results as an inevitable byproduct of the bad economy or we can find a way to distinguish ourselves from the mass of competition. Going back to the piranha analogy, there will not be enough food put in the tank this year. You want to be the lone fish that jumps and catches the morsel before it hits the water.

One easy way to elevate yourself is to get out of the "bid-list" mentality. Asking to bid jobs or be on someone's bid list is a weak, passive way to solicit business. An inanimate fax machine can be on a company's bid list. You're better than that. In a good economy, working this way yields mediocre results, and we're not in a good economy.

Here's why I don't like bid lists:
• You're not the only one receiving that request for quote (RFQ).
• Bid lists reduce everything down to price. If you have a premium product, your bid is going to look high when compared to an inferior product. It's extremely difficult to point out your product's superiority on a bid list.
• RFQs are often red herrings. Have you ever walked into a prospect's building and been surprised by some newly purchased materials despite having been erroneously assured that you're on the bid list?
• Bid sheets create the illusion of an even playing field. Buyers often have a preferred vendor in mind before they distribute RFQs. If you're not the preferred vendor, you have a few strikes against you from the start. The preferred vendor's bid only has to be in the ballpark. You may be the low bidder across the board and still not get the job. Low bids are rejected because "they're too low, something must be wrong." High bids are accepted because "it's not that much more, and we know what we're going to get." It's not spelled out on the RFQ, but it's a reality.
Here's what you can do:
• Get the order before it's put out for bid. If you can find out what projects are upcoming before the RFQs go out, you'll have the opportunity to sell before your competition becomes aware of the opportunity. Great sales pitches can easily be drowned out by dozens of mediocre ones. Don't wait. Pre-sell your products.
• Work to become the preferred vendor. If customers want to give you work, selling becomes exponentially easier. If you're a second- or third-tier vendor, don't assume that you can bid your way to the top tier. Find out why your competition is getting the lion's share of the work. Nine times out of 10, you'll be told it's price. It's probably not.
Think about it. If you're a purchasing agent, are you going to admit that you prefer one vendor because he lets you use his condo in Palm Springs every year or because the owner likes him? No, you'll give a less accurate, but more respectable answer ("His prices are lower"). Find out what makes your customer tick, then you can decide how to improve your relationship, or if you even want to.
• Find out what's important to your customer so you can bid accordingly. Don't assume all of the important specs are on the bid list. Maybe you'll be the only vendor quoting product that hits all of their specs. Make sure they know it.
• Find a good reason to stay on your customer's radar. Repeatedly calling to ask, "Do you need anything?" or "Are you ready to order?" keeps you on their radar, but not in a good way. "I've got a good idea that should save you some money" is a call that your customers will want to take. A busy purchasing agent will often bypass the bid process and give an order to a rep who happens to be on their radar when a job is released. Contact them often, but make sure you have a worthwhile purpose or you'll be put on the dreaded straight-to-voicemail list.

As a hardwood vendor, my goal is to solve problems and present opportunities to my clients. A proactive approach often gives me the first-and sometimes the only-look at new business.

- Stephen Ondich is the owner of Commercial Forest Products, Fontana, Ca., a manufacturer and distributor of hardwood products. He can be reached at (909) 256-4583 or sondich@commercialforestproducts.com.